The State of the Secondhand Economy

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There are myriad reasons to shop secondhand: Whether they’re chasing after a trendy item that sold out before you could snag it, trying to be more environmentally conscious with your consumption, or just hoping to save a few bucks, consumers love resale. 

Brands do too: Per ThredUp’s Recommerce 100, 2023 was a year for explosive secondhand growth. The number of brands supported retail programs grew to 163, up from 124 the year prior. As of June 2024 that number is 148, indicating a drop in brand supported resale. This is to be expected after such an aggressive pace of launches. Single-brand resale platforms are difficult to manage, with unpredictable inventory, questionable profitability and the marketing challenge of selling secondhand goods against their full priced counterparts. 

Multi-brand platforms (and your local consignment shops) have advantages here in being purpose-built for resale, whether that’s facilitating peer-to-peer transactions or taking on the burden of selecting and managing inventory sent in from hopeful sellers. Per a July 2024 survey, the most popular online platforms for secondhand buyers and sellers are eBay and Facebook Marketplace, with 61% and 60% of secondhand shoppers saying they use the platforms, respectively. Just 19% of secondhand shoppers said they shop from brand-owned resale sites.

Selling secondhand in physical retail is nothing new, but digital platforms have had a bumpy ride of late with widespread criticism of authentication practices and even outright fraud. Amid the challenges of running these businesses, customer centricity got lost. Here we’ll dive into the who’s who and what’s what of secondhand shoppers and sellers. 

Nearly half of Americans shop secondhand

Secondhand shopping is harder than buying new, but nearly half (46%) of the general population reported making a secondhand purchase within the last three months. About one-quarter (26%) sold something, and of that group three-quarters (75%) also purchased a secondhand item in the last three months, indicating that sellers are far more embedded in this ecosystem than buyers are.

Participants in the resale economy largely mirror consumers as a whole: their distribution across genders, income brackets and community is consistent with the general population. However, this group does trend younger: they’re overrepresented among Gen Zers and millennials, and underrepresented among baby boomers. Gen Zers and millennials shop more often in general, not just secondhand, particularly in apparel, which is by far the most common secondhand shopping category.

Clothing rules the secondhand economy, followed by books, games and home furnishings

When asked what types of items they’ve bought secondhand, survey respondents reported buying clothing at much higher rates than any other category. Most shoppers will spend $50 or less on a secondhand apparel item, though luxury resale can command much higher price points.

As anyone who enjoys whiling away an afternoon in a used bookstore knows, the secondhand books and games market is also very active — a good thing for used booksellers given the very low average price point for that category. 

Consumers in search of a well-crafted sofa that won’t fall apart in three years are also flocking to secondhand furniture sellers, where price points are higher but making a purchase also requires asking a favor from a friend with a truck. 

Saving money and finding unique items motivates secondhand shoppers

Saving money is the primary benefit of shopping secondhand, but it’s not the only reason people are willing to do the extra legwork of browsing secondhand shops and searching resale sites: just 22% of secondhand shoppers said that they only shop secondhand because they can’t afford new items. More than half (57%) of secondhand shoppers said that they shop secondhand for reasons other than price, but do benefit from saving money. Household income largely dictates the difference: consumers in lower income households are more likely to say they shop secondhand because they have to, while those with higher incomes shop secondhand because they want to.

Those who don’t shop secondhand primarily resist because they generally prefer to buy new items, and they don’t trust online sellers. More specifically, their major reasons for not shopping secondhand online come down to trust:

• Not trusting they would receive items in their promised condition (38%)
• Not trusting that returns would be honored (31%)
• Not trusting that they would receive the items at all (27%) 

Online resale platforms have to work to combat the bad reputation some online sellers have, earned or not, in order to continue to grow their customer base.

Returns (or lack thereof) are secondhand shoppers primary challenge

Improving the secondhand shopping experience requires better recourse for unsatisfied customers. Resale often means final sale with few exceptions, so if an item doesn’t work out as expected it’s then on the buyer to sell it to another customer, probably at a loss. This risk aversion leads people to buy new from stores with friendlier return policies. 

Managing reverse logistics in a category with already complex inventory isn’t appealing for platforms or individual sellers, however, so improving the category’s reputation for accuracy of photos and product descriptions, including flaws, is critical to draw in more shoppers.

Brand authentication is particularly important for luxury goods purchases, and something that platforms that do take in and inspect inventory tout as a major benefit of using their services. However, there’s been much criticism of actual authentication practices, leading to further distrust of sellers. 

Closet clean outs and earning cash motivate secondhand sellers

Few things are more exhausting than a full Marie Kondo home purge of unwanted items, whether that’s clothing, books or a dusty treadmill. To then organize and photograph those items for sale is another feat unto itself, but the opportunity to turn trash into cash is sufficient motivation for those who will go on to list their items on Ebay, Poshmark or Facebook Marketplace.

Secondary motivations are giving items a new life, helping others shop affordably and contributing to environmental sustainability — all things that make it easier to part with an item that no longer fits into one’s current life.

Selling secondhand is a burdensome task

Secondhand buyers and sellers are unified in their distaste for returns. Once an unwanted item is out of the house, a seller won’t want to take it back. This is coupled with earning what the seller believes their items are worth. After negotiating with buyers and platform fees, some buyers question if the work is worth it, or if just donating items in sellable condition might be a better use of their time. 

Creating product listings and photography aren’t sellers’ primary challenges, but offloading some of the work to resale platforms is certainly appealing to many: 20% of secondhand sellers said they would definitely (and 36% said they would probably) pay for a service to handle all aspects of reselling for them. Among those willing to pay, a plurality (68%) would pay up to 20% of their earnings for this service, though 24% of respondents said they would pay less than 10% of their earnings. 

Managing one’s own resale business is real work, but both buyers and sellers prefer a peer-to-peer experience over selling to and buying from intermediary resale companies. In a peer-to-peer environment buyers can negotiate and sellers have greater control over their prices and earnings. While many are willing to take a cut to their earnings for some extra help, the amount they’re willing to shell out may or may not be sufficient to cover the platform’s cost of providing such a service. Offering full service resale, like ThredUp and The RealReal do, is ultimately expensive for the platform and for individual sellers who forfeit a larger share of their earnings. ThredUp’s recent launch of a peer-to-peer option is revealing as the company experiments with tactics to improve profitability: the path forward for secondhand is in supporting peer-to-peer sales.